BiggerPockets Real Estate Podcast - How to Execute the “Slow” BRRRR Strategy in 2026 (Full Walkthrough)

Episode Date: August 21, 2026

The BRRRR method is not dead—far from it. In fact, it’s still one of my absolute favorite investing strategies today. But in 2026, you need to change how you use it. I’m about to show you a variation of the traditional BRRRR that gives you all the upside and scalability you’d expect from one of these deals, but with far less risk, more time, and greater flexibility. And in this housing market? That’s exactly what you need. I’m talking about the “slow” BRRRR. The steps are similar: You still buy a rental property, rehab it, rent it out to tenants, refinance, and repeat the process, but here’s where this strategy takes a turn. Rather than targeting a run-down property and maximizing its value, you identify a completely habitable, cash-flowing property that just needs a little TLC. This achieves three things that the average BRRRR doesn’t, and it could be the difference between merely buying a decent property and landing a home-run deal. And I’ll prove it to you with a real example property. We’ll crunch the numbers, compare potential returns, and outline eight steps for putting this strategy into action in 2026! In This Episode We Cover How to execute the “slow” BRRRR strategy in 2026 (step by step) A real example property with real numbers and potential returns How to identify the right kind of rental property for this strategy Three reasons why Dave prefers the “slow” BRRRR to other investing strategies Why you don’t need to perform a “perfect” BRRRR for it to be a win And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠h⁠⁠t⁠t⁠ps://www⁠.biggerpockets.com/blog/real-estate-1320⁠⁠⁠⁠. Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is my favorite strategy for buying rental properties in 2026. You buy a property, renovate it to drive up the value, then pull your money back out and use it again on the next deal. Recycle the same cash and keep every property instead of flipping houses or saving up for a new down payment every time you buy. Yes, I am talking about the birth. The formula still works if you adapt it for the 2026 real estate market. And for me, that means doing the slow burn. It's the strategy I'm using most often in my own investing

right now. You can buy on-market properties with a regular old conventional mortgage, renovate at your own pace as tenants move out, and refinance when rates are right, not on a lender's timeline. It's a low drama, repeatable way to scale a portfolio without expensive hard money loans or forced tenant turnovers. So today, I'm sharing my complete playbook. We'll talk about my recommended buy box, the return numbers you need to hit, and I'll even show you a full example deal that I found a real duplex right on the MLS. This is how you execute the slow burn in 2026. Hey, what's up, everyone? Welcome to the Bigger Pockets podcast. I'm your host, Dave Meyer. And today, we are talking about my favorite rental property strategy these days.

I call it the slow bur. Now, you've probably heard of a burr before, but if you haven't, it is a great time-tested strategy. It's actually an acronym B-R-R-R-R-R-R. It stands for buy, rehab, rent, refinance, and repeat. And the reason it's such a popular proven strategy is that it allows you to sort of combine the best elements of a house flip and the best element of a house flip and the best elements of a rental property into one deal. And on top of that, you get to recycle your money into more and more deals. So it allows people who are in scale mode, who want to grow their portfolio, to do that very efficiently. The Burr method allows you to keep acquiring more properties in a safe, risk-adjusted way without having to save up for a down payment each and

every time. Now, there are many different flavors of the burp. People adapt this to all different markets, all different sub-straties, whether you're a long-term rental, you can do it midterm rentals or short-term rentals. So it's a super popular, flexible strategy. And here's kind of how it works. Basically, you buy a property, let's just say you buy it for $200,000 and you put $50,000 into it. So you've done the buy and the rehab part. But during that renovation, your goal should be increasing the value of that property by more than the $50,000 that you put in. So let's just say you put 50 in and now you've made that home worth, let's call it 320,000. That is a totally realistic scenario in a lot of markets. You can absolutely do that.

And now what you've done is created a ton of equity. You have all this value embedded in that home. So what you do next is you rent out the property so you can start getting cash flow in. and then you move on to the fourth step, which is where you refinance. And this is kind of where the magic happens. Because you've done the rehab and driven up the value. That's kind of that flipping side of the deal that I was talking about. You've rented it out. But the way that you're able to recycle your capital is to pull out the equity that you've gained

and built yourself by doing the renovation and use it for something else. So using this example, if you have a property that's now worth 300, $320,000. You're going to have to keep some money as a down payment in. Let's assume that's 25%. So that would be $80,000 in this example. We're going to pay off our loans and what we took out for our renovation costs. Let's just assume that's another $180,000-ish, meaning you have like $260 that you need to pay off, but your property's worth $320, meaning you can pull out roughly $60,000. There's going to be closing costs and all that. But let's just, we'll round it. Let's call it $50,000. How about that? So you can take out the $50,000 you built up in equity and use it for your next deal.

Hopefully you can see why this is incredible, right? You just bought a cash flowing rental property, earned, earned $50,000, but that money you earned isn't trapped in that last deal. You free it up through the refinance and you can use it in something else. So it's great. It's like a great way to go about real estate investing. Almost every investor I know has done this at some point. I recommend it to almost everyone. But there is this narrative that I kind of want to just address up front because you hear a lot that the burr is dead, right? People say, oh, you can't do a burr anymore in 2026.

And I kind of think that is nonsense. The sentiment that sort of creates this narrative is that people think that you have to do the quote unquote perfect burr. The perfect burr is where when you go and do that refinance, you get 100% of the money you put into that deal from your down payment, your closing costs, maybe some of the renovation budget if you came out of pocket for that, that you get 100% of your capital out. That's a perfect burr. But that is not, or at least it should not be the standard. That is not at all how I would think about underwriting a bur deal. If the only way you do a burr is you get 100% your capital out,

you're never going to invest. Like that is just their unrealistic goal. If you could do it and refinance out 50%, 60%, 70% of your capital, it's still amazing. You're still making tens of thousands of dollars. You still own a cash flowing rental property and you're still most of the way there for your next down payment. Find me another investment you can do that with. So I don't think the burr is dead and I actually think there's great ways to utilize the burr in 2026, my favorite of which is the topic we're going to get into now, that's the slow bur. So the difference between a slow bur and a traditional burr is just the speed that which you do it.

Hopefully that is obvious based on it being called the slow burr. But with a regular burr, at least how a lot of people do it, is that they go out, they buy a property and they try and fix it up as quickly as possible. And they do this for two reasons. One, time value of money. Makes sense, right? the faster you can earn your return on your capital, the better your overall ROI. The second reason is that a lot of times when you do a burr, you are buying a property that's in

pretty rough shape that you might not be able to get traditional financing on. And you might be using a bridge loan or a hard money loan or private money that could be anywhere from 10 to 15% interest rates. And so you want to finish that deal as quickly as possible because paying $12,000,000,000,000, paying 12% or 14% interest adds up really quick. That eats into your profits really quick. And so usually on a burr, you're trying to finish it between six and nine months, roughly, depending on the complexity of the project and the ARV and all these different things.

But speed is of the essence during a traditional burr. So why then am I proposing the opposite? I like a slow burr for a couple of reasons. First and foremost, I target different kinds of properties with a slow burn. I don't buy something that is really run down and I'm going to, I can't get financing on. I like to find properties to do a burr that are going to be more cosmetic. So that is kind of the number one thing I'm looking for here is that I don't like doing big, heavy renovations.

I still want to create value, but I'm going to do it through cosmetic renovations that aren't going to be super complex and aren't going to take that much time. I don't want to do foundations. I don't want to be moving a ton of walls. because I do this out of state and long distance, that level of complexity I'm not really interested in. So one that makes the whole stress level lower. But number two, what buying a cosmetic fixer does is that it unlocks traditional financing. If you go out and buy an abandoned home or a zombie home or whatever these things,

like a traditional bank's not going to lend to you. You have to go out and get that hard money loan that's going to cost 12, 14%. But if you can buy a home where there's a home where there's not going to lend to you. tenants in place, you can get residential financing. So if I do this on a duplex or a three unit or a four unit, I can go out and get a traditional investor loan, put 25% down and pay somewhere between six and a half and seven percent. The third reason I like the slow burr is that you get cash flow from day one. We'll talk about that more when I talk about my buy box, but when I buy a slow burr, what I want is a property that I can rent out right away. It does need to have upside potential,

right? All deals need upside potential. So I need to be able to do a cosmetic rehab and drive up the value of the property and drive up rents. But I like buying a deal that I can cash flow on day one. And then I get to be patient. That's sort of the third value here is that I get to do my renovation opportunistically. A lot of times when you do a traditional burrow, you do a flip, you have to go and you have to renovate it right away immediately. That works most of the time, but you don't get the opportunity to learn from the tenants. What do they like about the unit? What do they not? What are some of the unique elements of this home that need to be fixed? What things maybe don't need to be fixed? If you have tenants in place, I know people get spooked by having tenants in place. I don't,

personally. If they've been paying on time, if you can get historic rent rolls and they're good tenants, like, I'm not that worried about it. That gives you time to plan your rent. renovation. It gives you time to source good contractors to come up with a great plan and not rush into it. And I really like that. And if you're buying it right and you're getting cash flow from day one, who cares if it takes you three months, six months to do the renovation? I personally just wait until tenants move out and then I'll just renovate the units when they're vacant. Who am I to kick out someone who's paying rent on time and I'm making good cash on cash return? It's fine. Then when the opportunity strikes, I will do the renovation. That is the value of the slow burn.

And again, not saying the other kinds of burs don't work, but for me, this is what I like in this kind of market. I like being able to buy deals with conventional financing. It takes so much risk off the table. I am buying deals that cash flow right away. And then once I do the renovation, the cash flow is much better. It allows me to be patient on my refo. because I'm not paying 12%. Or maybe I'm not excited about anything going on in the market right now, and then I just don't refinance for a while because I have a normal mortgage rate,

and then I'll just get a better cash on cash return. So for me, doing it slow, where I can work with my property manager and contractor and wait and do these things as they come up, have low stress, low risk, but still a big upside. I love the slow burn. It works great for me. And I want to show you all an example

of how it can work great for you as well. We've got to take a quick break. We'll be right back. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress? Here's a better question. What if you could buy brand-new construction homes,

10% below market value, in the best markets across the country, without making real estate your second job? That's exactly what rent-to-retirement does. They're a full-service, turn-key investment company handling everything for you. In some cases, investors get 50 to 75% of our down payment back at closing, plus interest rates as low as 3.75%. They've partnered with BiggerPockets for over a decade, helping thousands

invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. Most deals don't fall apart because of the numbers. They fall apart because of the financing. You find a property that cash flows. The deal makes sense. But then, the lender looks at your personal income, your tax returns, your debt-to-income ratio, and suddenly the deal doesn't qualify. That's the disconnect. Because as investors, we're not buying based on our W-2, we're buying based on the asset.

That's why host financial offers DSCR loans designed for real estate investors, where qualification is based primarily on the property's income, not your personal finances. So no W-2s, no tax returns, and no DTI requirements. And with loan to value options up to 80 or even 85% on eligible deals, you can keep more capital available as you grow. If you're buying rentals, refinancing, or scaling your portfolio, go to hostfinancial.com. That's h-o-st-tfinancial.com and see what you qualify for.

Investing in real estate has always been smart, but it hasn't always been simple. Now, it's both thanks to the Fundrise Flagship Fund. The Fundrise Flagship Fund. The Fundrise Flagship Fund launched more than five years ago with a mission of delivering low-fee access to Blue-chip private market real estate. Today, the Fundrise flagship fund has grown to manage more than a billion dollars of real estate on behalf of hundreds of thousands of investors, making it one of the largest funds of its kind. For those who believe real estate has an important role to play in their portfolio strategy, the Fundrise flagship fund has positioned itself as both a simple and a smart option. Whether you're starting with $10,000 or $10,000, the Fundrise Flagship Fund makes adding real estate's unique potential for both passive income and consistent growth.

Just visit fundrise.com slash pockets to make your first investment today. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the fund's prospectus at fundrise.com slash flagship. This is a paid advertisement. Some listeners may wonder why their insurance quote only took 30 seconds. Some listeners may wonder why their insurance quote took 30 seconds. A better question is, how long will that policy actually hold up when you need it? At NREG, the goal isn't just getting coverage in place.

It's making sure your investment property is properly protected when a real claim happens. That's why they take time to evaluate each property's unique risks and build coverage design for the realities investors face because anyone can sell a policy. N-R-R-E-I-G focuses on standing behind it. Visit N-R-E-I-G.com slash B-P-L-L-C to learn more. All right, so I'm just going to pull up Redfin. I looked around a little bit before the show. I picked Birmingham, Alabama, somewhat randomly.

I know a little bit about the market. It's a good rental property market for sure. So I found this one. It is a four-unit. It is $300,000. eight bed, four bat, 4,000 square feet. So if you're looking at it, it's on YouTube, you can see it. I'll just pull it up.

But basically, it's four two ones. If you look at the outside of the property, it's pretty nice. It needs a little bit of work. It looks like some of the siding needs work, but some of it is brick. It does look like some of the concrete and steps needs a little bit of work. But overall, like if you look at it, it's pretty nice. Like the outside looks solid. Going inside, you see it has vinyl floors, like the paint is.

is okay. It could use a little bit of an upgrade. You know, the light fixtures are a little bit old, not fancy. There's some old piles, some old window treatments. And then the big opportunities, when I'm looking for a cosmetic fixer, I see this kitchen is super old. The cabinets look like they're from the 80s. This is kind of what I'm looking for. Is it renting at cash flowing rates right now? I'll do the analysis in just a minute. But for two beds, for 300 grand, I'm guessing this is going to cash flow. I think this is kind of a perfect candidate because they're not in bad shape, but could I spend 15 grand a unit, do this turn in under a month, probably? Could I drive up the rents from about $1,000 bucks a month to $1,200, $1, $1.50 a month, probably. And that's

going to be worth it, right? Like that math kind of pencil. So this is the kind of deal that personally I would look for. But let's just run the numbers. see if it works because again, we have to have our criteria both for the purchase at acquisition and after the refinance. And so I want to see and make sure that a cash flow is day one. That is key to the slow burn. Because if I'm going to take my time with this investment, I do not want to wait six months for tenants to move out and be losing money. I need to be earning a solid return during that. So let's just hop over to the Bigger Pockets calculator. So we're going to run it first as is, right?

Let's just assume that we're paying full price right now. So this is 300,000. That's what they're asking. That's the list price. So I'm going to put it in $300,000. And then I think my closing costs are probably going to be about $5 grand. Next, I'm going to talk about financing. And again, this is where the burr really shines, the slow bur.

Because I'm not using that expensive debt. I am going to be using a 25% investor loan. So I'm going to put 25% down. That's 75 grand. My interest rate's probably going to be around 7% right now. And my loan term is 30%. That's great. If I was paying 12%,

I don't know if this deal would work, but I feel confident with 7%. So for rents, I'm going to put it in at $750 per unit. And there's four units. So that's $3,000 a month in rent. That's basically a 1% rule deal. So I'm already thinking this is probably

going to cash flow, right? One percent rule on buying this for 300 grand. Gross monthly income is going to be about $3,000. But we got to go through expenses. But the reason I'm feeling confident that this is going to cash flow is that fun fact that Alabama has the lowest property taxes in the country. It's like less than half a percent of the value per year. So that comes out for this property $133 a month. Insurance is probably going to be about $1,800 a year. And then we got to put in our repairs, our CAPEX, our vacancy. So for repairs and maintenance and CAPEX, I'm going to put 5% each because we're going to be investing, remember, 40 grand into this property right up front. So hopefully I'm not going to have a lot of repairs and maintenance and CAPEX in the next few

years because I'm spending a lot of money more than 10% of the purchase price, right, in the next couple months, just getting this up to speed. Then vacancy, we got a model for that. We're going to put 8%, which is kind of high. That's like one month per year per unit. So we're properly accounting for that. And as an out-of-state investor, I expect I need to pay 8%. That's what I pay with my actual property managers, 8% in fees. That's it. Since tenants pay their own utilities, we could just hit update analysis here and see what we got. All right, this is a great deal. Even paying full price, which I don't know if you would have to on this, you're getting 6.6% cash on cash return. That's awesome. 440 bucks a month. This deal works as a rental. I would buy this as a rental. I would buy this as a

rental, even without the burr, which is my number one criteria here. Remember, right? I would want to see before the rehab at least a three or four percent cash on cash return. Because remember, that's not why I'm in it. I'm not really in this deal to make a ton of cash flow before the renovation, but because I'm going to take my time with this, I'm going to do three or four percent, right? I need some cash on cash return plus my amortization tax benefits. You know, I'm still getting a good return even before I do the renovation. And this deal is perfect for that. A 6.6% cash on cash return is great.

And it tells me that after my renovation, I have a pretty high chance that I'm going to still hit my target cash level. I still really want a good cash on cash return after I go do my renown. So that's what this deal looks like before I've done any renovation. I put $80,000 in,

I'm getting a $6.6 on cash return. That's awesome. Now, let's model out what happens when I do the slow burn. Let's just say, over the course of a year, my tenants all move out and I do the renovation. It might not work perfectly like that, but just for the example that I'm giving you, we have to put in additional money. We're going to put $40,000 in to renovate this property. So we're in for $120.

But if we can actually drive this up to $400,000, which I am confident we can do, we can take out a good chunk of money here. When we go to refinance, we're now taking out a bigger loan, right? We're putting 25% down on 400,000. So we're going to have to keep $100,000 of equity in the deal. We're going to be borrowing $300,000. So we need to take $100,000. That's going to be in the new deal.

Then, after year one, you can see this in the Bigger Pockets calculator. Our loan balance on our original loan is about $223,000. So we're going to need $3,000 left in the loan. We need $100 for our equity in our new mortgage. We need to pay off our own mortgage. And that leaves us about $73,000 that we can go and take out. That is awesome. Like remember the down payment we needed for this property was $80,000.

So yeah, you're still going to have to save up some money, pull money from somewhere else. But you're almost there. And if you consider that, what's that? We put in $120,000 into this deal. Remember because we had $80 for your down payment. then you put 40 in to do the renovation, you're getting 61% of your equity back out.

That's such an awesome deal. You're buying a cash flow in Quadplex that's fixed up and you can take 60% of your equity back out, $73,000 and put it into another deal. That's amazing. There is one other thing I want to do, though, here, is see what my cash flow is going to be after the refi because this is super important.

So the value of our property is now, $400,000. I'm going to need to consider purchase closing costs because refies do cost money, but they're usually more like $3,000. Then, you know, I'm going to need to put more down. Again, it's going to be about $100,000 now. But my rents are going to go up. So because I fix them up, instead of them being $3,000 total, so $750 per unit, let's just say that we can get them up to 900 a unit, so 3,600. You could probably get them higher based on the little research I've done, but let's just be conservative here and say that we're going to get 3,600. Now, our taxes are probably going to go up a little bit. Our insurance are probably going to go up a little bit,

so I'll account for that. I could argue that our vacancies would go down, but let's just be conservative and see how this comes out. What we get now is above a 4% cash on cash return, which I still think is good. The fact that you're getting a 4% cash on cash return and you are owning a recently renovated fourplex and I'm being conservative with rents, you probably could get a little bit higher. Like if you could get, you know, a thousand bucks a unit,

your cash on cash return is 7.3. That's amazing, right? You're taking out 73,000 bucks. You still own a rental property that's getting you somewhere between a four and 7% cash on cash return. I just don't know where else you can get that kind of return. So to me, this kind of investment not just makes sense on the upside where you're getting great value, but you're also limiting your risk. That's the benefit of the slow burn is that

you're getting that more safe traditional financing. You don't have to rush in anything. You can take your time. It's a little bit less stressful and you still get a lot of that upside. To me, that is why the slow burr works so well. So hopefully you're as excited about the slow burr as I clearly am. We got to take a quick break, but after this, I'm going to just give you a quick step-by-step execution guide of what to look for and how to pull off the slow burr in 2026.

Stick with us. We'll be right back. A lot of insurance companies compete on one thing, speed. But if you're protecting an investment property worth hundreds of thousands of dollars, Should speed really be the priority? NRAG believes strong coverage starts with understanding the property, the risks, and the realities of ownership. That's why they don't rush the process. Their policies are designed for real-world claims,

not just quick quotes. If you want insurance built to protect your investment when it matters most, visit nR-EIG.com slash B-P-LLC and learn more today. Do you ever notice how every passive investment somehow turns into a very active lifestyle. Active spreadsheets, active phone calls, active stress. Here's a better question.

What if you could buy brand new construction homes, 10% below market value, in the best markets across the country, without making real estate your second job? That's exactly what rent-to-retirement does. They're a full-service, turnkey investment company, handling everything for you. In some cases, investors get 50 to 75%

of our down payment back at closing, plus interest rates as low as 3.75% They've partnered with Bigger Pockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. There's a point where basically every investor realizes traditional financing stops scaling with you. At first, it works. You qualify with your income, your job, your tax returns. But as you grow, that model starts to break. Now, it's not really about your personal income.

It's about the income from your properties. That's where DSCR lending comes in. And it's why a lot of investors end up working with lenders like host financial. Host Financial qualifies deals based on property income, not personal income. So you're not dealing with W2s or tax returns or DTI constraints. And with 80 to 85% LTV, you can stay more flexible as you scale. It's just a different framework, one that tends to align better with how investing actually works. If you're buying rentals, refinance, or growing your portfolio, go to hostfinancial.com. That's hostefinancial.com and see what you qualify for.

Quick note before we dive back in. This episode is brought to you by Cash App. I've been using Cash App for years to send and receive money. Sometimes I need to pay someone who doesn't take credit cards or if I want to split a check or just to pay back a friend for a shared cost. Cash App also helps me online shop safely. More investors are thinking about where Bitcoin fits into a broader portfolio. Not as a short-term trade, but as long-term exposure to an asset that behaves differently from

traditional markets. Cash app makes that kind of Bitcoin strategy more straightforward. You can buy Bitcoin directly in the app, set up recurring purchases, or make larger buys when it makes sense for you. And with zero fees and zero spread on automatic purchases like auto-invest, roundups, and paid in Bitcoin, more of your money goes toward Bitcoin. Download Cash App today. Visit our link in bio, Bitcoin Services by Block Inc.

See the Bitcoin Disclosures at Cash App slash Legal slash podcast. Buying real estate has a funny way of making the future feel very real. You start thinking about mortgages, cash flow, tenants, and suddenly you realize if something happened to me, would the people I love be okay? That's why life insurance is one of those things that's easy to put off, but is super important to actually deal with. Ethos makes getting life insurance fast and easy, 100% online.

You can get a quote in seconds, apply in minutes, and potentially get same-day coverage. There's no medical exam. You just answer a few simple health questions online. You can get up to $3 million in coverage, and some policies are as low as $30 a month. Ethos helps provide financial security and helps protect the people who depend on you. Take 10 minutes to get covered today with life insurance through ethos. Get your free quote at ethos.com slash real estate. That's E-T-H-O-S dot com slash real estate.

Application times may vary, rates may vary. Welcome back to the Bigger Pockets podcast. I'm Dave Meyer, and today we're talking about the slow burr and how to pull it off. Before the break, I showed you an example of how this can work, but obviously that was just an example I found on the MLS, and you want to know how to do this for yourself. So the first thing I would do is to define. your buy box and think about what you want to buy. And for the slow bur, I think there's some

considerations you need to know. For the slow bur, it needs to be a cosmetic fixer. You can't do this big kind of renovation, big massive burr. And you are giving up equity opportunity on that. Like, you should recognize that. A traditional burr where you buy something really bad and do a big renovation, you can get massive equity kicks on that. But you're not going to be able to get that traditional financing, which is key to the slow burn. So when you're defining your buybox, what your target price should be, what neighborhood, you should talk to your agent about that. But you want a cosmetic fixer. And I usually like a small multifamily. Like if this is your first one, I think it's the best way to do it. I like the small multi because when one tenant leaves and you're doing a renovation,

you're still getting income from a second or third or fourth tenant. And that helps you float those times, right? Like you still have money coming through. Whereas, single family, you can still do it, but you're coming out of pocket when you're doing those renovations. So I really like doing that for your buy bucks. In terms of target ROI, I think, again, you want to be able to get at least 50% of your invested capital out of the deal. And I think you want cash flow before the renovation and after the renovation. My personal feeling about cash on cash return, I am not as dogmatic about it as a lot of people. I think if you are in a great neighborhood that's probably going to appreciate, you know, getting a cash on cash return post

renovation at 4% is great. If you're not in a great appreciating market, I'd say that needs to be seven or eight percent, maybe a little bit higher. But that you can work on with your agent. So define that buy box. Second thing is to just figure out your deal flow. This is true of any strategy, but where are you going to find opportunities from? Is it from agents? Is it from pocket listings? or you're going to do direct to seller marketing. I think one of the great things about the slow burrs, I've been able to find these deals on market. You know, like a lot of times the reason people go off market

is they need to find such deep discounts to do these burs, these big renovations, to justify the cost of that high-interest loan. But with a slow-bur, a lot of times you can find these kinds of deals on market. I have had luck doing that, but figure out where you're going to get your deal flow from. that's number two. Number three, figure out your financing.

Now, most of this is the same as just buying a regular home, right? If you were buying an on-market deal that people are living in and it's nice, like it's kind of the same as just buying a traditional rental property without a burr. But the thing that you want to focus on with the slow burr is how are you going to finance the renovation? There are different ways to do that. You could do it with cash. You could do it with a helock from a previous property.

You could try and wrap it into a loan using a change. using a two or three K loan. Maybe you can work with a DSCR lender who's willing to loan you the money for a rehab might not be as cheap as a conventional mortgage, but hopefully it'll be less than a hard money loan. So I think that's the thing that most people should think about is how do I want to pay for that rehab?

If you have capital and cash, in my opinion, the best way to do it is pay for it out of pocket. Get the financing for the acquisition, put 25% down, and then pay for the rehab, out of pocket and don't pay any additional because you're going to refinance and get that money back relatively quickly and it just helps your returns. The second way to do it is to wrap your expenses, but make sure you're not paying those high, hard money costs. You can't wrap your

renovation costs in a slow burn and pay 10, 12, 14%. Doesn't work. If you're getting that kind of interest rate, you got to do your deal quickly. So either do something like a 2 or 3K loan where you wrap your renovation expenses into the loan. That is an owner-occupied strategy, but slow-bur works with house hacking. Absolutely works with house hacking. Or talk to a non-QM lender, like a DSCR lender. They might be able to do this for you.

Or you can take out a HELOC on your existing home. Like there are ways to do this, but this is what you should be thinking about. Don't just go buy a slow burr and say, I will renovate it when I can. You could, but ideally you have a plan in place for how you're going to pay. for the renovation, so you should do that. Once you've done that, go and find a great property, right? Like, negotiate hard, use your leverage, find the best possible deal, and close. Like, that's not really any different with the slow burn.

The thing to do with the slow burr is once you close, start developing your scope of work. Now, this is where it differs, slow versus regular burr. Regular burr, you've got to go right into it. One of my favorite parts of the slow burr is now I've closed, I can go get multiple bids on everything. I can go talk to the tenants about what they like and what they don't. I could just wait for three months and see what starts to break, what doesn't work well, what the tenants don't like, start to learn the property. I would start getting quotes on things in the first month or two, but it doesn't need to be day one.

That is one of the benefits of the slow burn. But don't just wait forever. Start learning as much as you can about the costs and the upsides. Start figuring out what your future rents are going to be, how much you want to invest. but I would say have a plan within three months. I think that's a good time frame. You don't need to execute it in three months, but you say like, this is the scope of work I'm going to do.

When tenant number one moves out, here's exactly what I'm going to do to their unit. Because once they move out, then you do have to move quickly. Once they're out, you want that contractor in there day one, ready to rock. Maybe you got two months of vacancy, tops. That's how I try and do it. One month of renovation, one month to,

show the property, someone's hopefully in there two months of vacancy. You can't do that. You can't wait until the tenants move out to start getting bids and figure out your scope of work. So even though you don't have to start right away, putting your plan in place is super important. So you're ready to turn it on the second the tenant tells you that they're leaving. After that, it's simple. You execute on your renovation. I mean, sometimes that's complicated, but just work with your contractors, work with your property managers and do it to the best of your ability. Then you lease up at new rents, right? Hopefully you've improved the value of that property that people are going to be happy to pay higher rents because you've made such a beautiful place to live. Once you've done that

for all of them, you've stabilized the property and you refinance. It's great. I will say, sometimes you don't even have to renovate all four of them to refinance. Maybe if you just do two of them of a four unit and it's going really well, you can refinance that. That's the beauty of the slow burn is that you get to do it slowly. You get to have options. You have optionality and choice, which as an investor is something I always like. I personally like to take my time. I work full time. I buy a couple deals a year.

I make four or five investments total every year. And I like to do them well. And giving myself time to do them over the course of months, I really like that. I think for the average investor, it's a really good way to do it. So if you want to try this out for yourself, again, it's really not much different than doing any other type of investing. to find your buybox. Again, you're going to have to look for the right kind of deal, a cosmetic fixer that cash flows. That's what you want. Cash flows before you do the renovation. Number two, just find that deal flow. Figure out your financing is step three. That's another big thing you need to do.

From there, you got this. Just go out, find a great deal, negotiate hard, close, put together your scope of work so you're ready to go when the tenant moves out and then just execute on your plan. once you've executed on your plan and you have something to do with the money, go out and refinance if that makes sense for you at the time, and you've done it. That's the slow bur. It's a great way to invest right now. It really, really works. It might not be as sexy as a perfect burr, but perfect burrs are really hard to come by right now.

And I would rather do two or three slow burrs over the next couple of years than wait around for a perfect burr that may or may not come. because these kinds of deals make real money. They really move you towards financial freedom. They improve your financial position. So why not do them? If you can find these deals and you can, these work. This is a playbook that works in 2026.

And hopefully, after listening to this episode, you now know how to do it for yourself. If you have any questions about this, you can always hit me up on Instagram or on biggerpockets.com. I love answering questions about this. Let me know what you're thinking if you like the slow burr and how I can help. That's it for this episode of the Bigger Pockets podcast. I'm Dave Meyer.

Thank you so much for watching. I'll see you next time.